Investors Report. First Quarter 2016

Size: px

Start display at page:

Download "Investors Report. First Quarter 2016"

Sabina Owens
5 years ago
Views:

1 Investors Report First Quarter 2016

2 Disclaimer This document has been elaborated as a part of the information policies and transparency of BBVA Continental and contains public information, own source and provided by third parties, that can be corroborated with their sources. This document has been prepared solely for informational purposes and does not constitute an offer, or invitation or solicitation of an offer to subscribe or purchase securities. This document and its contents does not constitute the basis for any contract or commitment. This document may not be photocopied, reproduced and/or distributed in whole or in part, without prior authorization from BBVA Continental.

3 Sections 1 Peru: Attractive economy and financial system 2 Organization 3 BBVA Continental vs. Peers 4 Ratings 5 Social responsibility and Awards 6 Appendix

4 Peru: Attractive economy & financial system

5 Peru: one of the most stable and fastest-growing economies in the region Peru is one of the economies with fastest growth in Latin America with one of the lowest inflation rates in the region GDP growth Inflation 7.1% 6.8% 4.8% 4.6% 5.4% 3.6% 3.8% 2.8% 2.2% 2.0% 1.8% 3.7% 3.5% 3.7% 3.5% 3.5% 2.9% 2.9% 1.0% Peru Mexico Colombia Chile Brazil Average 2016 Projected Brazil Colombia Chile Peru Mexico Average 2016 Projected Source: Central Bank of Peru & BBVA Research 5

6 sovereign investment grade, relatively stable currency and low levels of debt Ratings AA- BBB+ BBB+ BBB Investment Grade: BBB- Public Debt as a percentage of GDP BB BB 65.7% Average debt of the General Government / GDP for countries with BBB+ rating for 2015 CCC SD 23.3% 22.1% Source: Standard & Poor s Currency depreciation against USD 20.4% 19.6% 20.1% 5% 0% -5% -10% -15% -20% -25% -30% -35% -40% Jan-15 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Chile Brasil Colombia Mexico Peru -9.15% % % % % Source: Central Bank of Peru Source: Bloomberg 6

7 Peru has a solid Financial System with great opportunities of expansion The Peruvian Banking System has shown strong growth Performing loans and Deposits PEN thousands of millions with great potential for future expansion Loans to private sector as a percentage of GDP % CAGR D: L: 15.9% D: 14.5% YOY 14.0% 69% 53% YOY 11.7% 34% 31% Dec-12 Dec-13 Dec-14 Dec-15 Mar-16 Chile Brazil Colombia Peru Mexico Loans Deposits* *Other obligations are excluded from deposits Source: Superintendencia de Banca, Seguros y AFP Source: World Bank. Last available information. 7

PEN USD and an active Central Bank, which promotes PEN denomination of

60% 58% 58% 57% 63% 3.18 67% 3.41 68% 3.31 3.50 3.40 3.30 3.20 3.10 3.

Additional Legal Reserve Requirement in foreign currency (FC) for growing

Additional Legal Reserve Requirement for Derivatives to reduce the upward

Increase in the marginal reserve requirement in FC.

loans in FC*. 55% 50% 45% 50% 2.55 54% 55% 53% 52% 50% 2.80 2.80 2.78 2.

50 2013 2014 2015 2016 Steady reduction of the legal reserve requirement in

8 PEN USD and an active Central Bank, which promotes PEN denomination of Loans PEN - denominated Loans and Deposits at the Banking System 70% 65% 60% 58% 58% 57% 63% % % Objective: Reducing credit exchange rate risk Central Bank Mesures: Additional Legal Reserve Requirement in foreign currency (FC) for growing FC loans. Additional Legal Reserve Requirement for Derivatives to reduce the upward pressure on exchange rate. Increase in the marginal reserve requirement in FC. Increase the legal reserve requirement in FC linked to targets to reduce loans in FC*. 55% 50% 45% 50% % 55% 53% 52% 50% % 50% 47% 47% Steady reduction of the legal reserve requirement in PEN in order to encourage loan growth in PEN New Currency Repos to convert liquidity in FC to liquidity in PEN. Loans PEN Deposits PEN* Auction of deposit of the Public Sector. Exchange rate PEN/USD *Other obligations are excluded from deposits Source; Superintendencia de Banca, Seguros y AFP *Excluded operations higher than USD10MM and 3 years (before 4 years) from June Source: Banco Central de Reserva del Perú, BCRP 8

9 Organization

10 Shareholders March 2016 BBVA Continental and Subsidiaries are part of the Economic Group formed by Holding Continental, whose shareholders are BBVA Group and Breca BBVA Group Breca Group 50.00% 50.00% BBVA Consumer Finance 36.00% Comercializadora Corporativa % Holding Continental Others 92.24% 7.76% BBVA Continental 0.009% IRCSA % % % % Continental Bolsa Continental Titulizadora Continental Fondos Source: BBVA Continental. 10

BBVA Group March 2016 Appropriate balance between developed and emerging markets that allows the BBVA Group to diversify its sources of income by providing a high degree of recurrence in their

11 BBVA Group March 2016 Appropriate balance between developed and emerging markets that allows the BBVA Group to diversify its sources of income by providing a high degree of recurrence in their results Gross Income Mar-16 (1) 16.8% of BBVA Group s Gross Income Developed Weight: 39% YoY var.: -8% Emerging Weight: 61% YoY var.: +41% 1/ Excludes Corporate activities; YoY change in constant Euros Source: BBVA Group 11

12 12 Breca Business group founded by the Brescia Cafferata family, is one of the largest business conglomerates in Peru, with operations in Peru, Chile and Brazil Board of Directors Management Committee FINANCIAL SERVICES INSURANCE AND HEALTH INDUSTRY MINING TOURISM REAL ESTATE FISHING AND AGROINDUSTRY SPECIALIZED SERVICES Marcobre

13 Peruvian Financial System December 2015 Financial system Institution PEN Million Net loans Dec-15 Deposits Dec-15 Net Income Dec-15 Banking system Banks (17) 216, ,767 7,040 Banco de la Nación 10,198 24, Other financial institutions Cajas Municipales (12) 13,472 14, Financieras (12) 8,404 4, Cajas Rurales (7) Edpymes (12) 1, Leasing (2) COFIDE 7, Agrobanco 1, The four largest banks concentrate around 83% of the banks loans and deposits 13% 8% 8% Loans Loans Deposits Net Income 87% 92% 92% Banking System Other Financial Institutions *Other obligations are excluded from deposits Source: Superintendencia de Banca, Seguros y AFP 13

14 Key performance indicators of BBVA Continental: March 2016 #1 in Cost of risk* #1 in NPL ratio #1 in Coverage ratio 1.36% 2.33% % Leading Bank in Peru Strong shareholders #3 in profitability ROE: Annualized net income / Average equity #4 in efficiency 22.85% 43.41% BBB (S&P) A- (Fitch) #2 in assets S/.80,701 million Operates in one of the most attractive economies of the region #2 in performing loans #2 in deposits*** S/.47,697 million S/.46,624 million Peru, one of the most dynamic and attractive economies in the region BBVA Continental: second largest bank in the country and leading institution for over 60 years Strong shareholders: BBVA Group, leading global financial institution, and Breca, one of the largest business conglomerates in Peru #2 in number of branches 330 *Cost of risk: Provisions for the last 12 months between total loans (average of the last 12 months). **Other obligations are excluded from deposits. Ranking among the 4 largest banks in terms of assets. Source: Superintendencia de Banca, Seguros y AFP 14

15 BBVA Continental vs. Peers

Strong banking platform December 2015 Distribution network: One of the largest in the country Evolution in transactions per channel 2008 2015 9,263 points of

Market Peers Share 15% 1% 26% 24% 18% 5% Branches ATM Express Agent Internet Banking Mobile Banking Others** 3,552 1,974 4,071 2,330 5,207 7,155 2nd 17.

registration 1,290 1,444 1,671 1,777 288 297 322 331 Dec-12 Dec-13 Dec-14 Dec-15 3rd 2nd 14.4% 15.

16 Strong banking platform December 2015 Distribution network: One of the largest in the country Evolution in transactions per channel ,263 points of service More than 4.5 million customers 26% 32% 25% 7% 21% 7,200 9,263 Ranking vs. Market Peers Share 15% 1% 26% 24% 18% 5% Branches ATM Express Agent Internet Banking Mobile Banking Others** 3,552 1,974 4,071 2,330 5,207 7,155 2nd 17.4% Digital Banking: Our objective: To be the leading Digital Bank in the region Online forms to apply for LifeMiles credit cards More digital campaigns: Online registration 1,290 1,444 1,671 1, Dec-12 Dec-13 Dec-14 Dec-15 3rd 2nd 14.4% 15.4% Lending platform Improvements in the user experience on the web Express agents* ATM* Branches * ATM & EA as of September 2015, last available public information. ** Other channels include Telephone Banking, POS, Net Cash and Automatic debit. Source: Superintendencia de Banca, Seguros y AFP & BBVA Continental 16

17 Outstanding growth PEN Million Performing loans Deposits* CAGR 13.5% YOY 10.8% CAGR 13.7% YOY 12.9% 47,788 47,697 47,287 46,624 32, ,149 2,126 7,149 1,491 8,869 6,562 5,116 42,041 38, , ,254 1,154 2,132 9,562 8,433 1,194 1,408 9,016 9,103 8,633 7,497 8,700 10, ,548 2,419 1,568 2,421 10,391 10,396 1,201 1,134 9,816 9,643 9,505 8,993 12,803 13,447 32,178 2,262 12,480 17,437 36,811 2,815 12,171 21,825 39,607 2,788 12,607 24,212 3,046 2,813 16,011 14,550 28,230 29,261 Dec-12 Dec-13 Dec-14 Dec-15 Mar-16 Corporate Large enterprise Middle enterprise SME Dec-12 Dec-13 Dec-14 Dec-15 Mar-16 Demand + Saving Term CTS Mortgage Consumer Credit card Microfinance *Other obligations are excluded from deposits Source: Superintendencia de Banca, Seguros y AFP 17

18 Performing loans PEN Million and percentage (%) BBVA Continental shows steady loan growth Retail customers 13, % -55 bps 14,358 14,385 Performing loans 20.04% 19.57% 19.48% 43, % -18 bps 47,788 47,697 Mar-15 Dec-15 Mar-16 Loans Market share Banking System 73,826 YOY Variation 11.0% 21.97% 21.88% 21.79% Business customers 12.1% 0 bps 29,710 33,430 33,312 Mar-15 Dec-15 Mar-16 Loans Market share Banking System 218,908 YOY Variation 11.7% 22.96% 23.05% 22.96% Mar-15 Dec-15 Mar-16 Loans Market share Banking System 145,082 Source: Superintendencia de Banca, Seguros y AFP YOY Variation 12.1% 18

8% Microfinance Credit card Consumer Mortgage SME Middle enterprise Agriculture and livestock 4% Mining 6% Transport, storage and

19 High quality of loan portfolio March 2016 Loans by economic sector Loans breakdown 0.2% 1.3% 3.3% 5.1% 7.4% 9.7% 21.8% 16.6% 2.4% 5.5% 20.2% 16.8% Microfinance Credit card Consumer Mortgage SME Middle enterprise Agriculture and livestock 4% Mining 6% Transport, storage and communications 8% Construction 3% Others Utilities 14% 5% Real estate 7% Top 20 clients and others Industry 27% Commerce 26% 18.9% 17.1% Large enterprise Corporate 13.25% 28.2% 25.6% Top 20 Clients Others 86.75% BBVA Continental Banking System Source: Asociación de Bancos del Perú 19

20 Deposits PEN Million and percentage (%) Growth continues also in deposits Retail customers 15, % -15 bps 17,265 17, % -22 bps 20.14% 19.84% 19.99% 41,299 47,287 46,624 Mar-15 Dec-15 Mar-16 Deposits Market share 22.29% 22.44% 22.07% Banking System 85,079 YOY Variation 12.0% Business customers 13.9% -31 bps Mar-15 Dec-15 Mar-16 Deposits Market share 25,994 30,022 29,619 Banking System 211,246 YOY Variation 14.0% 23.79% 24.26% 23.48% Mar-15 Dec-15 Mar-16 Deposits Market share Banking System 126,167 Source: Superintendencia de Banca, Seguros y AFP YOY Variation 15.5% 20

21 Liabilities and Capital Breakdown PEN USD 22.7% 15.4% 34,649 42,245 42,524 8% 7% 10% 15% 15% 5% 11% 8% 21% 4% 17% 14% 6% 20% 4% 4% 15% 16% Others Equity Wholesale funding REPOS CTS Term 33,095 38,871 38,177 2% 2% 3% 33% 32% 30% 4% 3% 3% 21% 25% 21% 37% 32% 31% Demand + Saving 40% 38% 43% Mar-15 Dec-15 Mar-16 Mar-15 Dec-15 Mar-16 Source: Superintendencia de Banca, Seguros y AFP / Asociación de Bancos del Perú 21

22 High level of self-financing and balance sheet denomination in PEN March 2016 Loans and Deposits PEN Thousands of millions 103.1% 100.1% % % 102.3% PEN-denominated Performing Loans 68% 67% 68% 63% 66% 62% 55% 57% 54% 57% 50% 51% 52% 54% 50% 50% Dec-12 jun-13 Dec-13 jun-14 Dec-14 jun-15 Dec-15 Mar BBVA Continental Banking System Average PEN-denominated Deposits 61% Dec-12 Dec-13 Dec-14 Dec-15 Mar-16 Loans Deposits* Loans/Deposits 59% 58% 58% 54% 55% 53% 53% 53% 52% 50% 47% 47% 47% 46% 46% Dec-12 jun-13 Dec-13 jun-14 Dec-14 jun-15 Dec-15 Mar-16 BBVA Continental Banking System Average *Other obligations are excluded from deposits Source: Superintendencia de Banca, Seguros y AFP 22

23 Financial margin PEN Million and percentage (%) 8.14% 8.05% 6.75% 6.55% 5.09% 4.69% 7.41% 6.10% 4.35% 6.55% 6.38% 5.47% 5.42% 3.61% 3.58% 8.00% 6.00% 4.00% 2.00% 0.00% 3,309 3,631 3,741 4,052 4, % -4.00% (980) (1,117) (1,055) (1,346) (1,615) -6.00% -8.00% Dec-12 Dec-13 Dec-14 Dec-15 Mar % 1 Financial Expenses Financial Income NIM NIM PEN NIM USD 1 NIM ratio: Interest margin for the last 12 months divided by average interest earning assets (interbank funds, investments, net loans). Source: Superintendencia de Banca, Seguros y AFP / Asociación de Bancos del Perú 23

24 Expenses management We manage an attractive efficiency ratio Administrative expenses* PEN Million Efficiency Ratio March 2016 Bank % Bank % Bank % BBVA Continental 43.41% Number of employees March % Banking System Average 21, % 11.7% 3.0% 6.7% Mar-15 Mar-16 Mar-15 Mar-16 Mar-15 Mar-16 Mar-15 Mar-16 Bank 1 BBVA Continental Bank 4 Bank 3 6,972 Market Share 9.0% 5,514 5,570 * Includes Amortization and Depreciation Source: Superintendencia de Banca, Seguros y AFP Bank 1 Bank 4 Bank 3 BBVA Continental 24

25 Risk management Outstanding asset quality BBVA Continental Past due loan ratio by product and segment March % Microfinance 1.62% SME 8.79% % Middle enterprise 6.28% % % % Large enterprise Corporate 0.00% 1.50% Car-loan 1.43% 1.19% 1.74% 2.23% 2.17% 2.33% Credit Card 3.13% Consumer 2.13% Dec-12 Dec-13 Dec-14 Dec-15 Mar-16 Mortgage 1.14% Past due loan ratio Coverage ratio Source: Superintendencia de Banca, Seguros y AFP 25

26 Risk management Best Past Due Loan Ratio and Coverage Ratio March 2016 Banking System Average % % % % Best Risk Cost ratio vs. Peer Group 3.08% 2.91% 2.80% 2.17% 2.10% 2.09% 2.20% 2.11% 2.05% 2.06% 2.03% 2.06% 1.96% 1.70% 1.70% 1.39% 1.47% 1.28% 1.42% 1.36% Dec-12 Dec-13 Dec-14 Dec-15 Mar-16 Annual Variation Bank 4 11 bps Bank 3 Bank 1-1 bps -15 bps BBVA -6 bps Continental 2.70% 2.33% BBVA Continental 2.49% Past due loan ratio 2.58% 3.20% Bank 4 Bank 1 Bank 3 Coverage ratio % Maintaining high levels of voluntary provisions PEN Million 3,057 3, ,322 2, % ,746 2, % 1,499 1,451 Required Voluntary 1,431 1, ,195 1, % 2.0% 1,345 1, ,010 Dec-15 Mar-16 Dec-15 Mar-16 Dec-15 Mar-16 Dec-15 Mar-16 *Risk Cost: Provisions for the last 12 months between total loans (average Bank 1 BBVA Bank 3 Bank 4 of the last 12 months) Continental Source: Superintendencia de Banca, Seguros y AFP 26

27 Profitability management Net income PEN million Return on Equity - ROE March Bank 4 Bank % 23.38% 699 BBVA Continental 22.85% Bank % Return on Assets - ROA March 2016 Bank % Banking System Average 2.25% -16.7% -6.9% 22.5% -1.2% Bank % Mar-15 Mar-16 Mar-15 Mar-16 Mar-15 Mar-16 Mar-15 Mar-16 Bank % Bank 1 BBVA Continental Bank 3 Bank 4 BBVA Contin 1.76% 2.03% Banking System Average Source: Superintendencia de Banca, Seguros y AFP 27

28 Solvency management Regulatory capital PEN million Composition of capitalization 61,682 60,993 10,000 8,000 6,000 4,000 2,000 38,961 4,844 1,019 3,825 47,207 5,866 1,221 4,645 53,495 7,371 2,139 5,232 8,209 8,474 2,247 2,208 5,962 6,266 60,000 50,000 40,000 30,000 20,000 10, % 12.43% 12.42% 13.31% 2.62% 2.59% 4.00% 3.64% 9.82% 9.84% 9.78% 9.67% 13.89% 3.62% 10.27% (CE T1 (CE (CE 8.69%) T1 (CE T1 T1 9.18%) 8.75%) 8.32%) Min % - Dec-12 Dec-13 Dec-14 Dec-15 Mar-16-10,000 Dec-12 Dec-13 Dec-14 Dec-15 Mar-16 TIER I TIER 2&3 RWA TIER I TIER 2&3 Source: From July 2012 to July 2016 capital requirements will increase gradually to comply with new local regulations, based on Basel III standards. BBVA Continental / Superintendencia de Banca, Seguros y AFP 28

29 Ratings

30 International & Local Rating Rating agencies have granted BBVA Continental the best international and local ratings: Instrument Fitch Ratings Standard & Poors Foreign currency long term issuances A- BBB Foreign currency short term issuances F1 A-2 Local currency long term issuances A- BBB Local currency short term issuances F1 A-2 Individual rating WD - Outlook Stable Stable Instrument Apoyo & Asociados Equilibrium PCR Top local Short term deposits CP-1+ (pe) EQL 1+.pe Categoría I Categoría 1 Term deposits > 1 year AAA (pe) AAA.pe paaa AAA Corporate bonds AAA (pe) AAA.pe paaa AAA Subordinated bonds AA+ (pe) AA+.pe paa+ AA+ Leasing bonds AAA (pe) AAA.pe paaa AAA Common shares 1a (pe) 1a Clase.pe PC N1 Categoría 1 Issuer rating A+ A+ A+ A Outlook Stable - Stable Stable 30

31 Social Responsibility and Awards

32 The Bank maintains its commitment to society and is highly regarded in the market SOCIAL RESPONSIBILITY AWARDS Social, Economical and Environmental Responsibility Report First environmental facility made in South America Green loan to promote green lending projects Program: Leer es estar adelante BBVA Continental is part of the Best Corporate Governance Principle s Index of companies 32

33 Annex

34 Annex 1: Clients and Products Retail and Middle Market Banking Corporate & Investment Banking Retail Banking Middle Market Banking Corporate Banking Global Markets Individuals and small businesses with annual sales under USD 1.4 million Medium-sized businesses with annual sales over USD 1.4 million and below USD 75 million Global corporate groups with annual sales over USD 75 million Customers demanding FX transactions and derivatives Products for individuals: credit cards, consumer loans, mortgages loans, vehicle loans, saving deposits, demand deposits, term deposits, CTS, funds and investments. Products for businesses: Leasing, foreign trade loans, discounts, commercial loans, factoring, advance accounts, credit cards, funds, savings deposits, demand deposits, term deposits. Also syndicated loans and debt issuances. Treasury: FX transactions (spot and forward), IRS, Cross Currency Swaps, options. 34

35 Investors Report First Quarter 2016

Investors Report. Third Quarter 2016

Investors Report. Third Quarter 2016 Investors Report Third Quarter 2016 Disclaimer This document has been elaborated as a part of the information policies and transparency of BBVA Continental and contains public information, own source and